5 Things to Know About Philanthropy Right Now
With government cuts slashing funding for programs across health, education, and employment, philanthropy has become more essential — and impactful — than ever. Of course, it can’t begin to fill the gaps left by those cuts.
Moreover, traditional philanthropic institutions are not necessarily built to meet today’s complex challenges. Some $250 billion currently is parked in donor-advised funds (DAFs), while less than half of this country’s 40 largest foundations meet the minimum annual payout of 5%. The rest of their funds? Tied up in endowments.
But changes, they are a-coming. Here are five things to know about philanthropy right now.
New donors with new ways of giving are causing a seismic shift in the philanthropic landscape. Family foundations in particular are proving to be agents of change. They are expanding their grantmaking capacity: 36% now distribute more than $1 million a year — an increase from 23% over the past decade — while 71% of family foundations pay out more than the mandatory 5% minimum of their income. Clearly, they are going for both scale and impact in their giving.
In addition, women (most notably MacKenzie Scott, Melinda French Gates, and Susan Buffett) are literally changing the face of philanthropy. Compared to men, women typically give a greater share of their assets to a broader range of organizations. This influence will only grow stronger in the coming years, because women will control the lion’s share of the $100+ trillion dollars that is predicted to move between generations over the next two decades (a.k.a. the Great Wealth Transfer).
Unlike the personal allegiances to various organizations that guided previous generations of philanthropists, giving by today’s new generation of donors tends to be rooted in their personal values and driven by the belief that they can effect social change through philanthropy.
Furthermore, collective giving via DAFs and other collaborative vehicles allows donors to make a group impact that would be difficult to achieve by themselves, without them needing to manage individual grants. Collective giving can be a powerful fundraising channel, although grantees currently rank collaborative givers lower than other funders for clarity about eligibility and their application processes.
Meanwhile, a younger demographic of philanthropists is giving via digital tools such as mobile apps. Their recurring monthly small-dollar donations as well as DAFs continue to grow faster than traditional checkbook giving.
Flexible, trust-based funding is increasingly favored — i.e., unrestricted grants versus project-specific limitations. Leaders in the social sector have advocated for this for years, as well as for multi-year funding. Progress has been slow, but the crises caused by recent social sector cuts evidently galvanized funding for general operating support, which almost doubled to 38% in 2025 after hovering around 20% for nearly 20 years.
The advantage of flexible funding is that it enables organizations to adapt quickly and build long-term capacity by focusing on their mission and community rather than meeting donor requirements. The downside is that many donors have concerns about accountability and how to measure the impact of unrestricted grants. These are issues that the new generation of funders must address.
Grantmaking is becoming more participatory. Instead of coming from the top down, decisions are increasingly community led, with 83% of large US foundations reporting some degree of direct stakeholder participation. Because who knows and understands community needs and solutions better than the organizations who serve those communities?
Redistributing power in the decision-making process will require foundations and other donors to rethink established wisdom around expertise and control as well as to build trust with communities. Both of these things will take time but ultimately lead to better, more sustainable outcomes.
As it does everywhere else in today’s world, artificial intelligence increasingly plays a role in philanthropy. Grantmakers and nonprofits alike are using AI to facilitate administrative tasks such as streamlining application reviews, researching prospects, and writing grants.
But as in other industries, the efficacy and benefits of AI tools can go either way. For example, it can combat misinformation, or it can add to it. Hopefully AI will prove useful in helping overburdened nonprofit staffers to better manage their workloads.
Staff well-being is mission critical for nonprofits and their funders alike. In this chaotic financial climate, with rising demand for increasingly volatile funding, nonprofit workers are more vulnerable than ever to burnout, turnover, and chronic stress.
Investments in workplace support — such as shared responsibilities; co-leadership; and dedicated funding for sabbaticals and/or structured rest — can help to embed well-being into organizational culture and allow the organization to respond to changing conditions.
In sum, what’s the overall outlook for philanthropy right now? The good news is that it’s strong and growing: US charitable giving by individuals, bequests, foundations, and corporations climbed past the $600 billion mark in 2025 for the first time ever, rising to a new high of $617.2 billion.
The bad news is that nonprofit organizations are increasingly stressed by ongoing political polarization and economic uncertainty.
So what’s a socially conscientious foundation to do? There are three things that foundations can do right now to help struggling nonprofits:
Provide unrestricted support. General operational grants, rather than earmarked project funds, will help organizations to cover vital overhead costs.
Make multi-year commitments. Instead of writing one-off checks, make multiple-year pledges that will provide nonprofits with stability during financial upheavals.
Give above-minimum payouts. Scale up distribution of annual assets past the statutory 5% minimum and work towards actively meeting surging community demand.
There you have it. Now go forth and give!